Financial news

The MSE Index closed slightly lower during yesterday's trading session at the Malta Stock Exchange dragged down by declines in smaller capitalised equities. On the other hand, the two largest banks consolidated at their previous closing prices.

Among banking sector equities, Lombard Bank Malta gained 8c or 2.7 per cent as a grand total of 25,000 shares were purchased in rapid succession across five transactions clearing all supply up to the €3.05 level.

On the contrary FIMBank shares shed 3.4 per cent as investors purchased 12,100 shares on offer at the $1.778 level while leaving, at the end of the session, an offer for further 301 shares unfilled at this price.

Bank of Valletta, which is due to report its full year results on October 31 was the day's most actively traded equity with 9,201 shares being swapped across 12 transactions. Deals were struck at and slightly above the day's closing unchanged level of €3.90. Similarly, HSBC Bank Malta closed unchanged as two investors swapped 1,204 shares at the €2.98 level.

Away from the banking sector, MaltaPost dropped 2c4 or 2.8 per cent as 2,089 shares were sold down to the €0.82 level. On Monday, the company announced that its full year results will be presented for approval to a board meeting on January 15, 2009.

Santumas Investments, the closed-ended collected investment scheme, gained 35c or 13.2 per cent on the transaction of 123 shares which were struck at the €3.00 level. Elsewhere, Middlesea Insurance closed lower by the slimmest of margins as two investors swapped 1,000 shares at €2.949.

Go continued to trade at €2.20 following last Friday's announcement that further to the judgment of the Court of Appeal relating to the former Cable & Wireless employees, the company had filed an application for retrial proceedings and an application to stay the execution of judgment pending the retrial application.

Similarly, Grand Harbour Marina, International Hotel Investments and Crimsonwing closed the session unchanged at €2.20, €1.00 and €0.50 respectively.

Weekly eurozone economic review

The pace of deterioration in the real economy has taken the European Central Bank (ECB) by surprise. Inflation worries are beginning to take a back seat with the scene being set for rate cuts. Though the ECB kept rates on hold last week at 4.25 per cent, ECB President Jean Claude Trichet noted at the press conference that a cut had been discussed, suggesting that the first cut in five years could come sooner rather than later.

On the data front, euro area year on year Harmonised Index of Consumer Prices (HICP) fell to 3.6 per cent in September from 3.8 per cent in August. Meanwhile, eurozone manufacturing activity fell to a near seven-year low in September, below the flash estimate, and there may be more contraction to come despite some relief from a fall in prices.

The figure confirms the economy is experiencing a severe downturn, that weakness is spreading, and that the slowdown will be rather prolonged. Elsewhere, investor sentiment in the 15-nation euro area fell to its lowest level on record in October, dragged down by concerns about the global financial crisis, according to the Sentix group survey. Employment data was no better as eurozone unemployment rose unexpectedly in August, adding to signals the area economy is slowing sharply. The jobless rate increased to 7.5 per cent from July's upwardly revised 7.4 per cent.

In Germany, Europe's largest economy, the slowdown in the construction industry accelerated in September, with activity declining for the seventh month in a row. On a more positive note, retail sales in Germany rose at their fastest pace in nearly two years in August but their surprising strength offers limited respite to Europe's biggest economy as it battles a manufacturing downturn and potential recession.

This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.